UltraSys Ltd. - The Regis Company · 2018-06-15 · Page 3 UltraSys Ltd. Overview of UltraSys Group • UltraSys Ltd. is a worldwide professional information solutions provider and

UltraSys Ltd.

September 2015

Section Page

1 Overview of UltraSys Ltd. 3

2 Corporate structure 4

3 Segment information 5–13

4 Capital Agenda considerations 14

6 SWOT analysis 15

7 Stock price performance 16–17

8 Recent developments 18–19

9 Financial overview 20–22

Contents

Page 3 UltraSys Ltd.

Overview of UltraSys Group

• UltraSys Ltd. is a worldwide professional information solutions provider and comprises four business segments:

• Scientific, Technical and Medical (STM) — provides scientific, technical and medical information and serves scientists, health professionals and students worldwide

• Legal — provides legal, tax, regulatory news and business information solutions to legal, corporate, government, accounting and academic markets

• Risk Solutions and Business Information (RSBI) — provides data and analytics for property/casualty and life insurance carriers, as well as risk management, identity verification, fraud detection, credit risk management and compliance solutions for financial institutions. The primary focus of Business Information is data services, information and marketing solutions for business professionals. Business Information also publishes business magazines

• Exhibitions — organizes events, exhibitions and conferences, serving various industry sectors across the Americas, Europe, the Middle East, Africa and Asia Pacific

• The current market capitalization of the company is CU13.1 billion

• Headquartered in London, UK, the Group is listed on the London Stock Exchange and the NYSE. Institutional investors own 95% of the common stock outstanding

• In the past three years the Group has made a number of acquisitions (approximately 30 per year) of targeted data/content sets and assets in high-growth markets and geographies. At the same time, UltraSys has divested non-core and low-growth assets

• The Group has more than 150 subsidiaries in different jurisdictions, with a complex legal entity structure. The Group employs about 24,000 people worldwide

Source: Annual reports

4.965 4.995 4.965 4.614

1.515 1.546 1.576 1.621

1.253 1.261 1.117 1.018

986 978 1.050 1.098

885 1.006 949 886

9.603 9.786 9.656 9.237

0

2.000

4.000

6.000

8.000

10.000

FY 20XW FY 20XX FY 20XY FY 20XZ

North America United Kingdom The Netherlands Rest of Europe APAC

3.293 3.301 3.402 3276,8

2.614 2.576 2.507 2.234

2.565 2.542 2.368 2.302

1.131 1.366 1.379 1.424

0

2.000

4.000

6.000

8.000

10.000


STM Legal RSBI Exhibitions

Revenue by segment (CU million) Revenue by geography (CU million)

Business overview Key financials

CU million, y/e 31 December FY 20XW FY 20XX FY 20XY FY 20XZ

Revenue 9,603 9,786 9,656 9,237

Growth -0.9% 1.9% -1.3% -4.3%

EBITDA 2,827 3,021 3,107 3,080

EBITDA margin 29.4% 30.9% 32.2% 33.3%

EBIT 1,928 2,131 2,202 2,243

EBIT margin 20.1% 21.8% 22.8% 24.3%

Net profit 1,227 1,678 1,784 1,536

Net margin 12.8% 17.2% 18.5% 16.6%


UltraSys management organizational structure

UltraSys Ltd.

Scientific, Technical and Medical

Legal Risk Solutions

and Business Information UltraSys Exhibitions

• CEO • CFO • CTO • M&A • Strategy and business

development • HR • Business Unit MDs

• CEO • CFO • M&A • Strategy • Treasury • Tax • Group Management







Source: Company reports


Segment overview

Source: Company data, EY analysis

Scientific, Technical and Medical

(STM)

Legal

Risk Solutions and Business

Information (RSBI)

UltraSys Exhibitions

• Provides scientific, technical and medical information and serves scientists, health professionals and students worldwide

• The revenues for the segment declined by 3.7% in the past year, whereas EBITDA margin increased slightly to 37.2% compared with 37% in the prior year

• FX fluctuations affected revenues significantly in the past year; actual underlying growth after adjusting for FX movements was 2.0%

• Provides legal, tax, regulatory news and business information solutions to legal, corporate, government, accounting and academic markets

• The revenue for the segment has steadily declined, with a CAGR of 4.7% (over the past five fiscal years)

• EBITDA margin has been improving steadily from 8.8% four years ago to 12.4% last year

• Provides data and analytics for property/casualty and life insurance carriers, as well as risk management, identity verification, fraud detection, credit risk management and compliance solutions for financial institutions. The primary focus of Business Information is data services, information and marketing solutions for business professionals. Business Information also publishes business magazines

• The revenue for the segment declined 2.8% in the past year, largely because of exchange-rate movements. Excluding the FX impact, the growth rate was 6.0%

• EBITDA margin increased to 26.2% compared with 24.9% in the prior year

• Organizes events, exhibitions and conferences, serving various industry sectors across the Americas, Europe, the Middle East, Africa and Asia Pacific

• Segment revenue grew by 3.2% last year

• EBITDA margin stood at 19.6% last year, compared with18.6% two years ago

15%

24%

25%

35%

Segment Revenue mix Revenue by format Key highlights Business description

3%

97%

77%

22%

1%

74%

25%

1%

85%

12%

3%

Face-to-face

Face-to-face

Face-to-face

Face-to-face

Electronics

Print

Electronics

Print

Print

Electronics

Electronics


Scientific, Technical and Medical — Overview

• The Scientific, Technical and Medical (STM) segment provides scientific, technical and medical information and serves scientists, health professionals and students worldwide

• Key product and services includes: Primary research, reference and education content. It also provides its users with a variety of databases and workflow solutions

• Key clients include: Scientists, academic institutions, educators, research leaders and administrators, medical researchers, doctors, nurses, allied health professionals and students, hospitals, research institutions, health insurers, managed healthcare organizations, research-intensive corporations, and governments

• While reference has traditionally been a print industry, UltraSys has been driving a shift from print to electronic. UltraSys publishes more than 20,000 reference titles, with 1,400 new titles published annually along with supporting bibliographic data, indices and abstracts

• Last year, UltraSys acquired InkShare, a leading research management and social collaboration platform, from Fervor Investment Group for CU53 million

• Headquartered in the Netherlands, this segment has approximately 7,000 employees


Segment’s business model/revenue sources

Segment overview Key products

Products Description

STMDirect World’s largest database of scientific and medical research articles and one of the largest abstract and citation databases of peer-reviewed literature

ClinicalQuest A search engine that provides clinical insights via combining reference- and evidence-based medical content

Ingenium mission An analytical and search tool for engineers that provides integrated technical information

UltraSys Store Online portal to access and purchase UltraSys digital teaching and learning materials

Medzine One of the flagship independent general medical journals

InkShare A newly acquired research management and social collaboration platform. Researchers use the desktop and cloud-based tools to manage and annotate documents, create citations and bibliographies, collaborate on research projects, and network with fellow academics

Segment revenue — by format (FY 20XZ)

Segment revenue — by geography (FY 20XZ)

74%

Print 25%

Face-to-face 1%

North America

37%

Europe 30%

Rest of world 33%

Electronics

Medical and healthcare journal — by paid subscription, for medical society members and practitioners

Revenue streams

Science and medical research — by paid subscription, for academic institutions, government and corporations

Books are sold through traditional means (online and stores).

Electronic products are sold directly to customers.


Scientific, Technical and Medical — Trends and analysis


Key observations

Revenue trends (CU million) EBIT trend and margin (CU million)

Key competitors

3.242 3.293 3.301 3.402 3.277

2,1% 1,6%

0,2%

3,1%

-3,7%

-5,0%

-4,0%

-3,0%

-2,0%

-1,0%

0,0%

1,0%

2,0%

3,0%

4,0%

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

FY 20XV FY 20XW FY 20XX FY 20XY FY 20XZ

Revenues Variation

1.035 1.112 1.130 1.259 1.219

31,9% 33,8% 34,2%

37,0% 37,2%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

40,0%

-

200

400

600

800

1.000

1.200

1.400


EBIT (incl. corporate costs) Margin

• The STM information segment accounted for 35% of the Group’s revenues last year. In absolute terms, revenues declined 3.7% Y-o-Y

• The Group’s reporting currency is CU, however it has significant transactions in all currencies (USD, GBP, Euro, Yuan, AUD). As a result of this exposure, FX fluctuations affected revenues significantly in the past year, and actual underlying growth after adjusting for FX movements was 2.0%

• Subscription revenue growth, which accounts for the majority of revenue, has experienced stable growth of approximately 1% per annum, driven by increased volume and new sales

• In primary research, article submissions to subscription journals and usage grew in double digits. The Group experienced solid growth in databases and tools as well as in electronic reference and education

• Print book and pharma promotion revenues continued to decline, albeit at a slightly lower rate than in the prior year

• The volume of “author-pays” or “author’s-funder-pays” articles grew strongly from a small base. It launched new journals and now operates more than 100 standalone, author-pays, open access journals alongside its sponsored article option in more than 1,600 subscription journals

• Competition in the science and medical publishing industry is generally on a title-by-title and product-by-product basis

• Competing journals, books and databases are typically published by societies and other professional publishers

• Workflow tools face similar competition, including from software companies and internal solutions developed by customers

Management outlook Continued volume growth is expected. Demand for electronic products and solutions is expected to grow, while print book and pharmaceuticals promotion revenues are expected to decline.


Legal — Overview


Segment revenue — trend by format (FY 20XZ)



• This segment provides legal, tax, regulatory news and business information solutions to legal, corporate, government, accounting and academic markets. It provides legal and professional resources and services (including law software) to customers based in approximately 175 countries. This segment also provides news and business information, ranging from daily news to company filings, as well as public records information and analytics

• Products and services are generally sold directly to law firms and to corporate, government, accounting and academic customers on a paid-subscription basis, with subscriptions with law firms often under multiyear contracts.

• Last year, penetration of online information services grew strongly, and electronic solutions now account for 77% of segment revenue

• In the prior year, the segment strengthened its position in Asia through acquisitions and launches of enhanced products

• In China, LawStream acquired Legal Workshop, a provider of model contracts and practical guidance. This helped LawStream strengthen its position in high-growing corporate and intellectual-property practice areas

• Headquartered in New York, this segment has approximately 9,500 employees


LawStream Flagship product that offers legal, news and public records content for legal professionals

LawFinder Online legal research tool that supports legal professionals conducting research

LawGuide Provides legal practical guidance services in the UK

Citation Index Provides citation services

My Law Mentor Resource that offers guidance to attorneys handling transactional matters

75% 76% 76% 77%

25% 24% 23% 22%

1% 1%


Electronic Print Face-to-face

North America

66%

Europe 23%

Rest of world 11%


Legal — Trends and analysis


Key observations


Key competitors

• Revenue of the legal segment has been steadily declining since the Group acquired the segment via the acquisition of Law Stream five years ago

• The decline in revenue was primarily driven by subdued market conditions in the US and the major European markets

• Approximately 66% of revenue in the prior fiscal year was derived from North America, 23% from Europe and the remaining 11% from the rest of the world

• Electronic revenue, which now account for 77% of the total, saw continued growth, partially offset by print declines

• Despite the fall in revenue, the segments’ EBIT margin improved vs. last year, delivering 12.4% margin compared with10.3% margin in the previous year; yet this is considered low for the industry (the standard is 20%). This was achieved, in part, through the decommissioning of old infrastructure

• The Group will focus on process innovation and digitalization in order to improve margin in the next few years, because revenue growth is expected to remain stable in this segment

• Increasing the online footprint and achieving international growth outside the US and western European markets are the segment’s strategic priorities

• Other legal-information providers such as Wolters Kluwer

• Legal software developers

• For news and business info:

• Bloomberg

• Factiva

Management outlook Expected rollout of new technology platforms and products that will require significant investment. Customer market expected to limit the scope of segmental revenue growth.

2.706 2.614 2.576 2.507 2.234 0

500

1.000

1.500

2.000

2.500

3.000


Revenues

254 230 234 258 277

9,4% 8,8% 9,1%

10,3%

12,4%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

-

50

100

150

200

250

300




Risk Solutions and Business Information — Overview

• The Risk Solutions and Business Information (RSBI) segment provides data and analytics for property/casualty and life-insurance carriers as well as risk management, identity verification, fraud detection, credit risk management, and compliance solutions for financial institutions. The primary focus of Business Information is data services, information, and marketing solutions for business professionals. Business Information also publishes business magazines. The segment provides solutions that assist customers in evaluating, predicting and managing risk and improving operational effectiveness

• Its solutions combine proprietary, public and third-party information with analytics

• This segment is organized around market-facing industry/sector groups — the main sectors and the relevant solutions offered are shown in the graphic below. In addition to these sectors, RSBI provides information and data services to business professionals worldwide, including producing conferences, websites and business magazines

• The segment’s products are predominantly sold directly (with pricing based on each individual transaction) to insurance carriers and corporations; they are sold primarily on a subscription basis for government entities

• In the last year, the Group has reviewed its RSBI product portfolio and divested the construction and marketing sectors

• The strategic priorities of the segment are to continue to grow its data services businesses and strengthen its content, technology and analytical capabilities


Key sector solutions



Claims Finder A comprehensive US personal insurance claims database, it also identifies the existence of current/previous insurance and whether an applicant’s coverage has lapsed

Currency Risk Management

Content and information for anti-money-laundering compliance, risk mitigation and enhanced due diligence, including a payment efficiency solution and anti-money-laundering compliance tool for the banking and corporate sectors worldwide

Gauge Credit Solvency

A suite of credit risk management tools to help assess consumer creditworthiness and risk potential

ProtectMe Range of solutions to help clients verify that an identity exists and authenticate individuals

Revenue Retrieval Suite of tools that help governments find public records and analytics



85%

Print 12%

Face-to- Face 3%

North America

73%

Europe 22%

Rest of World

5%

Electronics

Insurance

Combination of data and analytics to property/casualty (P&C) and insurance carriers in the US to improve their businesses

Business Services

Provides financial institutions with risk, identity and credit risk management, fraud detection, and compliance solutions

Government Solutions

Provides data and analytics to US federal and local law enforcement and government agencies to help solve criminal and intelligence cases

Healthcare Solutions

Provides identity, fraud and clinical analytics solutions across key stages of the healthcare workflow to enable decision making for payers


Risk Solutions and Business Information — Trends and analysis


Key observations


Key competitors

• In the prior fiscal year, the revenue for this business segment declined 2.8% while its adjusted EBIT margin grew by 1.3% as compared with two years ago

• The decline was largely due to exchange rate movements, as the Group is exposed to fluctuations in a number of different currencies. Excluding the forex impacts, the underlying growth rate was 6.0% driven by volume growth, new product rollouts and expansion in adjacent segments

• Growth in the insurance segment was driven by demand for US auto underwriting business, good take-up of new products and services across the insurance workflow, and expansion in adjacent market verticals

• In Business Services, growth was driven by demand for identity authentication and fraud detection solutions, particularly in the financial services sector

• In government, the state and local segment continued to achieve strong growth. Federal government revenue trends improved during the year

• Data service providers on a title-by-title basis

• Major credit bureaus:

• Equifax

• Experian

• TransUnion

Management outlook The Group expects to invest in new products that leverage its content and developing analytics capabilities, as this is seen as the main driver for this segment in the near-term future.

2.632 2.565 2.542 2.368 2.302

-2,6%

-0,9%

-6,9%

-2,8%

-8,0%

-7,0%

-6,0%

-5,0%

-4,0%

-3,0%

-2,0%

-1,0%

0,0%

-

500

1.000

1.500

2.000

2.500

3.000


Revenues Variation

398 571 590 603

15,5%

22,5% 24,9%

26,2%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

-

100

200

300

400

500

600

700




UltraSys Exhibitions — Overview

• The Exhibitions segment organizes events, exhibitions and conferences, serving various industry sectors across the Americas, Europe, the Middle East, Africa and Asia Pacific. The segment caters to 40+ industry sectors across the globe

• Exhibitions and conferences cover several sectors, including construction, electronics, energy, engineering, entertainment, gifts/jewelry, healthcare, hospitality, interior design, logistics, manufacturing, pharmaceuticals, real estate, recreation, security/safety, transport and travel

• The majority of the revenues are generated from sale of exhibition space, sold directly or through local agents. The balance includes conference fees, advertising, sponsorship fees and, for some shows, admission charges

• Revenue for this segment is quite volatile, given dependency on global economic conditions. Additionally, a number of events are held infrequently or on an irregular schedule (i.e., they are not offered annually on a regular and predictable timetable)

• In recent years, the Group has been reviewing this segment and started divesting certain assets from markets and industries with low-growth prospects

• The Exhibitions segment is very fragmented (UltraSys market share is less than 5%)

• Headquartered in London, this segment has approximately 2,000 employees


Exhibition's business model

Segment overview Key events


World Construction Show International construction trade fair

EcoTec Market International exhibition of environmental equipment, technologies and services

Global Travel Fair Global event for travel industry

Unique Gift Expo One of the largest business gifts and home fairs in China

Global Smart Energy Summit A international event for smart and renewable energy



Face to Face 97%

3%

North America

47%

Europe 16%

Rest of World 37%

Electronics

Buy/sell

Find/evaluate

Learn

Exhibition

Sell product

General sales leads

Increase brand awareness

Buy products/services

Research market

Learn

Exhibitors

90% revenues

Visitors

10% revenues


UltraSys Exhibitions — Trends and analysis


Key observations

Revenue trends (CU million) Adjusted EBIT trend and margin (CU million)

Key competitors

• The US and Japan achieved strong growth. In the US, growth reflected strong demand across the broad portfolio of leading events

• Strong growth in Japan was driven by new launches and strong demand across its major events

• The European operations recorded modest growth and the domestic markets remained subdued, with international events in the UK and France being the only ones to achieve good growth

• In the previous fiscal year, the Group launched 15 new events and continued to review its portfolio to divest certain assets in low-growth geographies and sectors

• Industry trade associations, convention centers and exhibition hall owners

• Some of the German Messe

• Messe Frankfurt

• Messe Dusseldorf

• Messe Munich

Management outlook The Group expects solid underlying growth in the US and Japan but limited growth in Europe. Dependency on global economic conditions and irregular event schedules will also limit overall growth.

1.109 1.131 1.366 1.379 1.424

8,6%

2,0%

20,8%

0,9% 3,2%

-5,0%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

500

600

700

800

900

1.000

1.100

1.200

1.300

1.400

1.500


Revenues Variation

203 211 274 253 278

18,3% 18,7% 20,0%

18,3% 19,6%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

-

50

100

150

200

250

300




Capital Agenda considerations

• UltraSys is a mature company with solid fundamentals, including a relatively high level of cash flow generated from operating activities

• Based on its strong balance sheet and high interest coverage ratio, the Group has adequate flexibility to raise additional funding via the debt and equity markets

• Given the diversified nature of the Company, it has the option to raise capital through divestiture

• UltraSys has managed to generate high returns for shareholders (for example, ROE in excess of 40%, which has contributed to the Company’s relatively strong stock price performance)

• UltraSys would benefit from continuing to invest in new product development and the innovation of service offerings (including the identification of new applications for its products/services), as it is in a position to exploit trends such as the digitalization of content

• Capex is approximately 5% of revenue

• In the past two years, UltraSys has invested approximately CU225 million in more than 60 acquisitions (these have been financed primarily from cash generated by current operations). In addition to its portfolio expansion, UltraSys is considering expanding into new markets such as South America and APAC, which will involve significant investment

• UltraSys would benefit from a review of its portfolio of products/services and businesses. The Company faces some threats from various sources (including competitive threats) that could negatively affect its ability to generate revenue growth and maintain its ability to generate cash flow, as well as balance sheet balances and key ratios (e.g., interest coverage)

• Foreign exchange (FX) exposure: The Group operates in many different geographies and is exposed to FX fluctuations that have compromised performance. It does not appear that there is an FX hedging strategy in place

• Approximately half of the Company’s revenue base is subscription-based, which substantially enhances earnings predictability

• Almost 70% of Group revenues is in electronic format (up from 37% eight years ago). This strategic shift in the business has led to margin expansion

• Over recent years, the company has successfully increased its EBITDA margin from 27.6% (four years ago) to 32.2% (prior fiscal year). Margin improvement is attributed to the ongoing digitization of the product portfolio, reshaping of the product mix, and disciplined cost-control measures

• It appears that there is further room to optimize financial performance by achieving the full synergies from acquisitions made

• The significant number of acquisitions has led to a corresponding increase in the number and complexity of legal entities and corporate organization structure


SWOT analysis

• Diversified product and industry portfolio. The Group has a diversified product portfolio and revenue base that is spread across geographies (products/services are offered worldwide)

• Continuous innovation. Management has successfully transitioned the Group from print to digital products

• Strong cash flow provides investment flexibility

• Market-leading position. The Group has a market-leading position in almost all the markets it operates in, whereas for its Exhibition business it holds approximately 5% of the highly fragmented global market

• Intellectual-property issues. The industry is subject to increasingly stringent intellectual-property rights. Products and services are largely composed of intellectual-property content delivered through a variety of media, including journals, books, CDs and online, including the internet. The Group relies on trademark, copyright, patent and other intellectual-property laws to establish and protect its proprietary rights in these products and services, which may be invalidated or circumvented despite protection laws

• Open access. Open access to scientific and research journals may negatively impact the subscription revenue of the Company’s STM segment

• Legal publishing business may remain under considerable structural challenge. As large law firms transition from a policy of using more than one provider, this creates opportunities for current competitors and new market entrants

Threats Strengths

• New product offerings. The Group should focus on innovating products and technological infrastructure, including analytics platforms

• Emerging markets. The Group has a good growth opportunity in the emerging markets

• Consider rebalancing the portfolio of existing businesses to create opportunities for capital reallocation

• Consider a transformative acquisition

• Consider streamlining the Company’s existing structure

• Explore more effective FX hedging strategies

Weaknesses Opportunities

• Academic institutions sensitive to changes in private and governmental sources of funding. The principal customers for the information products and services offered by the STM publishing business are academic institutions, which fund purchases of these products and services from limited budgets that may be sensitive to changes in private and governmental sources of funding

• Declining share of print sales. A declining share of print sales may involve format migration and place current revenue streams at risk

• High reliance on limited geographies. A majority of the Group’s revenues are generated from its American and European markets

Source: EY Insights

SWOT


Stock price performance: UltraSys vs. peers

Source: CapitalIQ

UltraSys


Stock price performance: UltraSys vs. major indices

Source: CapitalIQ

UltraSys


Recent developments (1/2)

Source: Company websites

LawFinder wins SIIA CODiE Award for Best Legal Information Solution

• The Legal segment of UltraSys announced that LawFinder has won this year’s SIIA CODiE Award in the Best Legal Information Solution category. Three additional legal products and services were among the CODiE finalists, including LawStream and My Law Mentor

UltraSys Legal software segment builds executive team

• UltraSys Legal segment announced that it would be adding two new executives to its software leadership team. The segment, based in Atlanta, GA, is actively seeking to fill two executive positions: A VP — Strategy and a VP — Continuous Improvement

City Funds Releases White Paper on UltraSys Competitor, Ohlendorf Bauer Plc.

• Paulette Williams of City Funds released a white paper on Ohlendorf Bauer Plc. The activist investor owns CU800 million worth of shares and presented its thesis on creating more value for shareholders over the next several months. City Funds argues that Ohlendorf Bauer Plc. is at a strategic crossroads and has outlined three strategic alternatives to enhance shareholder value at the company. These alternatives include divesting non-core businesses, increasing investment in efforts to digitize more of the company's content, and creating a new business model to generate a more diversified revenue stream

UltraSys: Transaction in own shares

• UltraSys announced that it canceled 65 million ordinary shares held in treasury. Following the cancellation, UltraSys holds a total of 69,698,335 ordinary shares in treasury, and has 1,135,668,443 ordinary shares in issue

UltraSys names new Director of Business Development Strategy

• UltraSys announced that it has appointed Lin Sung as Director of Business Development Strategy. Sung, based in Beijing, joins UltraSys after serving as Director of Business Development at Tsinghua Publishing and Media Company

04 Jan

02 Jan

23 Dec 20XZ

13 Sep 20XZ

17 Nov 20XZ


Recent developments (2/2)

Source: Company websites

UltraSys Exhibitions sets up JV (UltraSys Fairs Ltd) with Fairs Ltd

• UltraSys Exhibitions enters South Korean maritime market by joining forces with event leader Fairs Ltd. The newest partnership will make its debut via Kormarine, Korea's largest international maritime industry event that has attracted more than 1,000 exhibiting companies and 40,000 visitors from more than 70 countries

UltraSys Risk Solutions and Business Information sets up JV with Credit Protection Professionals of India

• In line with its strategy to grow its data services business, UltraSys RSBI established a joint venture with Credit Protection Professionals India to grow the credit protection and data services space in India

UltraSys Exhibitions names new head of M&A

• UltraSys Exhibitions announced Nina Dumitru as Head of M&A of UltraSys Exhibitions. Ms. Dumitru took on the role that was vacated by Abhaya Khatri when she was tapped to be the new Head of M&A for the STM and Legal segments. This is Ms. Dumitru’s first role with UltraSys, and she previously served as Head of M&A for Intact Media Group

UltraSys Scientific, Technical and Medical segment and Legal segment name new head of M&A

• UltraSys named Abhaya Khatri as Head of M&A, STM segment and Legal segment. Ms. Khatri, who most recently was in charge of M&A for UltraSys Exhibitions, will lead UltraSys’ rebranding and market expansion efforts of the UltraSys Store product in the Legal segment while seeking economies of scale while managing M&A for both the STM and Legal segments

UltraSys announces appointment of director and chairman

• Emmanuel Garcia was appointed as Senior Independent Director and Wolfhart Hauser as Chairman of the Remuneration Committee. Mr. Garcia has been a member of the Supervisory Board of UltraSys NV and a Non-Executive Director of UltraSys PLC since 2006. He is a member of the Remuneration Committee, Nominations Committee and Corporate Governance Committee

15 May 20XZ

19 Jul 20XZ

12 Sep 20XZ

09 Aug 20XZ

30 Mar 20XZ


Income statement data

Income statement Revenue breakdown by segment

Currency: CU million FY 20XW FY 20XX FY 20XY FY 20XZ

Revenues 9,603 9,786 9,656 9,237

Net revenues 9,603 9,786 9,656 9,237

Revenue growth % -0.9% 1.9% -1.3% -4.3%

Cost of sales -3,402 -3,422 -3,389 -3,210

Gross profit 6,202 6,363 6,267 6,027

Gross margin % 64.6% 65.0% 64.9% 65.3%

Selling and distribution costs -1,720 -1,624 -1,608 -1,494

Administration and other expenses -2,602 -2,645 -2,504 -2,347

Share of results of joint ventures 48 38 46 58

Operating expenses -4,274 -4,230 -4,066 -3,784

EBIT 1,928 2,133 2,202 2,243

Finance income 27 26 16 11

Finance costs -403 -389 -330 -270

Disposals and other non-op. items -35 72 26 -18

EBT 1,517 1,842 1,914 1,966

Income tax expense -290 -163 -130 -430

Net income 1,227 1,678 1,784 1,536

Attributable to non-cont. int. -11 -8 -8 -8

Net income for common shareholders 1,216 1,670 1,776 1,528

Currency: CU million FY 20XY FY 20XZ

Scientific, Technical and Medical 3,402 3,277

Risk Solutions and Business Information 2,368 2,302

Legal 2,507 2,234

UltraSys Exhibitions 1,379 1,424

Total 9,656 9,237

Revenue breakdown by geographic origin


North America 4,965 4,614

United Kingdom 1,576 1,621

The Netherlands 1,050 1,018

Rest of Europe 1,117 1,098

AsiaPac 949 886

Total 9,656 9,237



Balance sheet data

Balance sheet


Currency: CU million Dec FY 20XY Dec FY 20XZ

Goodwill 7,322 7,970

Intangible assets 4,998 5,062

Property, plant and equipment 379 363

Deferred tax assets 707 742

Other 483 504

Total non-current assets 13,889 14,641

Inventories and pre-publication costs 227 227

Trade and other receivables 2,266 2,379

Derivative financial instruments 198 50

Cash and cash equivalents 211 442

Current assets 2,902 3,098

Total assets 16,791 17,739

Trade and other payables 4,152 4,218

Derivative financial instruments 6 37

Borrowings 1,037 1,082

Taxation 941 931

Provisions 27 30

Current liabilities 6,163 6,298

Borrowings 4,234 5,152

Deferred tax liabilities 1,722 1,690

Net pension obligations 606 1,011

Provisions 190 170

Non-current liabilities 6,752 8,023

Total liabilities 12,915 14,321

Combined share capitals 358 339

Combined share premia 4,619 4,512

Combined shares held in treasury -2,342 -1,771

Translation reserve -219 118

Other combined reserves 1,408 171

Combined shareholders’ equity 3,824 3,369

Non-controlling interests 53 50

Total equity 3,876 3,418

• The company’s total assets of CU17.7 billion, based on 31 December 20XZ, is composed largely of intangible assets (29%) and goodwill (45%). Internally developed intangible assets principally relate to investment in systems infrastructure to support electronic publishing activities, computer equipment and office facilities. Goodwill arises on acquisition of business or subsidiary

• The carrying value of goodwill and acquired intangible assets increased in 20XZ, reflecting the strengthening of the dollar against the Group’s reporting currency (CU) and acquisitions. Carrying values were partly offset by the annual amortization charge and divestments

• The Company has negative working capital of CU3.2 million as at 31 December 20XZ. The negative working capital is primarily driven by advanced receipts in its subscription and exhibitions businesses

• The Group appears to have sufficient liquidity and access to debt capital markets, providing the ability to repay or refinance borrowings as they mature and to fund ongoing operational requirements


Cash flow data

Cash flow statement


• In 20XZ, operating cash flow was CU2,203 million (20XY: CU2,218 million)

• Capital expenditure was CU432 million (20XY: CU493 million), including CU325 million (20XY: CU402 million) in respect of capitalized development costs

• In 20XZ, the Group completed 31 acquisitions for a total consideration of CU634 million; the Group also continued to dispose of assets across business areas, closing 17 small transactions for a total consideration of CU125 million


Cash generated from operations 3,109 2,962

Interest paid -320 -222

Interest received 8 21

Tax paid (net) -579 -557

Net cash from operating activities 2,218 2,203

Acquisitions -354 -634

Purchases of property, plant and equipment -91 -107

Expenditure on internally developed intangible assets -402 -325

Purchase of investments -16 -10

Proceeds from disposals of property, plant and equipment 10 16

Gross proceeds from business disposals 498 125

Payments on business disposals -186 -40

Dividends received from joint ventures 35 70

Net cash used in investing activities -506 -904

Dividends paid to shareholders of the parent companies -878 -904

Distributions to non-controlling interests -10 -11

Increase in short term bank loans, overdrafts and commercial paper 270 371

Issuance of term debt 294 942

Repayment of term debt -1,464 -480

Repayment of finance leases -16 -16

Acquisition of non-controlling interest – -24

Repurchase of ordinary shares -960 -1,022

Proceeds on issue of ordinary shares 200 72

Net cash used in financing activities -2,563 -1,072

Increase(/decrease) in cash and cash equivalents -851 227

Movement in cash and cash equivalents

At start of period 1,026 211

Increase(/decrease) in cash and cash equivalents -851 227

Exchange translation differences 37 3

At end of year 211 442

EY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. © 2015 EYGM Limited. All Rights Reserved. ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.

ey.com

Documents

UltraSys Ltd. - The Regis Company · 2018-06-15 · Page 3 UltraSys Ltd. Overview of UltraSys Group • UltraSys Ltd. is a worldwide professional information solutions provider and